UK’s CMA to probe Broadcom’s acquisition of VMware
The UK’s Competition and Markets Authority said on Wednesday that it has begun the first phase of an investigation into Broadcom’s $61bn takeover of VMware.
The US chipmaker announced last May that it had agreed to buy software company VMware and the deal is already being investigated by the European Commission.
The CMA will consider whether the deal will result in a substantial lessening of competition within any market or markets in the UK for goods or services. It has set a deadline of 22 March for the phase 1 decision.
The European Commission announced in December that it was launching an in-depth probe into the transaction. It said at the time that it was "particularly concerned that the transaction would allow Broadcom to restrict competition in the market for certain hardware components which interoperate with VMware's software".
Margrethe Vestager, executive vice-president in charge of competition policy, said: "Broadcom, a major supplier of hardware components, is acquiring VMware, a key server virtualisation software provider. Our initial investigation has shown that it is essential for hardware components in servers to interoperate with VMware’s software.
"We are concerned that after the merger, Broadcom could prevent its hardware rivals to interoperate with VMware’s server virtualisation software. This would lead to higher prices, lower quality and less innovation for customers and consumers."